Good afternoon and welcome to WEC Energy Group's conference call for third quarter 2018 results. This call is being recorded for rebroadcast and all participants are in a listen-only mode at this time. Before the conference call begins, I remind you all that statements in the presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in WEC Energy Group's latest Form 10-K and subsequent reports filed with Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. After the presentation, the conference will be open to analysts for questions-and-answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. And now, it's my pleasure to introduce Gale Klappa, Chairman and Chief Executive Officer of WEC Energy Group.

Good afternoon, everyone. Thank you for joining us today as we review our 2018 third quarter results. But first, a quick personnel update. As we announced earlier this month, Allen Leverett, who has been on medical leave since suffering a stroke last October, has resigned from active duty with the company. Allen will continue to serve on our Board of Directors, and I'm delighted that Allen will continue to bring his insight and his experience to our deliberations. In light of Allen's decision to resign, our board has elected Kevin Fletcher as the new President of WEC Energy Group. Kevin has more than 40 years of experience in the energy industry, most recently as President of We Energies and Wisconsin Public Service, our largest subsidiaries. His main focus will be on the operating and financial performance of our seven customer-facing utilities and he will report directly to me. I have had the privilege of knowing and working with Kevin for the past 25 years. With his experience in engineering, operations, customer service, and economic development, and of course, a strong focus on financial discipline, Kevin will provide great continuity for our organization going forward. For those of you who haven't met Kevin, he will be on hand with us at the EEI meetings in San Francisco and we're both looking forward to seeing you there. And now I'd like to introduce the members of our management team who are here with me today. We have: Scott Lauber, our Chief Financial Officer; Bill Guc, our Controller; Peggy Kelsey, Executive Vice President and General Counsel; and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. Now as you saw from our news release this morning, we reported third quarter earnings of $0.74 a share. This compared to $0.68 a share…

Thank you, Gale. Our 2018 third quarter earnings of $0.74 per share were $0.06 per share higher than the third quarter of 2017. These favorable results were largely driven by higher sales volumes and continued effective cost control. Warmer than normal summer temperatures coupled with strong growth in the region drove electricity use above our forecasts. The earnings packet placed on our website this morning includes a comparison of third quarter and year-to-date results for 2018 and 2017. My focus will be on the quarter, beginning with operating income by segment and then other income, interest expense, and income taxes. Referring to page 9 of the earnings packet, our consolidated operating income for the third quarter of 2018 was $303 million compared to $392 million during the third quarter of 2017, a decrease of $89 million. Excluding two tax items totaling $93 million, operating income actually increased $4 million. As previously discussed on the last two calls, the first tax item reflects the benefit of tax repairs, which was part of our 2017 Wisconsin rate settlement. And the second item relates to the federal tax legislation. We have a breakout of these items for your reference on page 7 and 8 of the earnings package. Recall that as part of our Wisconsin settlement, we agreed to apply the benefits of tax repairs to offset the growth of certain regulatory asset balances. The plan is proceeding as expected. And then regarding the benefit of tax reform, we currently project that the transmission escrow balance at Wisconsin Electric will be reduced from approximately $220 million to $40 million or less by the end of 2019. As of September 30, 2018, the balance stands at about $125 million, nearly $100 million reduction from the year-end 2017. My segment update will focus on the…

Scott, thank you very much. We're still standing and we're focused on delivering value for our customers and our stockholders. Operator, we're ready now for the question-and-answer portion of the conference call.

Now, we will take your questions. Your first question comes from Julien Dumoulin-Smith with Bank of America. Your line is open.

Hi Julien, how are you?

Hey good, good afternoon. Congratulations.

Thank you, sir.

Absolutely. I should add my congrats to Kevin there as well. So perhaps with that, I'd love to hear a little bit more on the CapEx plan articulated here. I know you addressed this, specifically the returns profile already. Just curious is that ROE change over time? Or is that pretty consistent as far as the criteria that you're employing and as best you understand the investments that you've already committed to that it's pretty consistent at that 50-50 at or above utility returns? And then also within that, if you could comment, have you – what portion of the energy infrastructure CapEx that you've delineated have you already sort of identified? I know that you've got at least one project named already thus far.

Yeah, very good questions, Julien. Thank you. First of all, in terms of the return criteria that we're using, let me back up and say that, I view this whole infrastructure segment that we've introduced over the last 24 months really as a sign of how strong the company is. As you know, we're one of the few companies in the industry that does not have to issue equity to finance our growth, that has a tax appetite and we're seeing – because of just the backdrop in the industry I believe, we're seeing very, very good assets that we're able to take a look at and able to be very discerning in terms of the particular projects that we would actually bring into the segment. So long story short, certainly cash returns, IRRs and ROEs are all an integral part of how we look at these projects. And I do see the projects when we talk about at or above our retail rate of return for these projects, we're really looking at an average return over the course of the life of the projects. So that's, I hope, answering one of your questions. In many cases, the returns are somewhat higher in the early years, but when we look at this, we're looking at consistent returns on average across the life of the assets. And then in terms of the projects that we already have basically underway, you remember last year, we closed on the Bluewater Natural Gas storage asset. And then this year, we added the Bishop Hill III, booked first at 80% ownership interest, now at 90% ownership interest, and we're also contractually committed to bring onboard next year after construction is complete the Upstream Wind Energy Center in Antelope County, Nebraska. So in essence, one way to look at it is with Upstream coming on-stream next year, about 20% of the segment amount for the next five years is already in-house, if you will. And we have a number of projects in the pipeline that we're looking at. Some of which I think will come to fruition, but we have a very good robust pipeline of projects that we are taking a look at. Rest assured, we will be disciplined. And we're not going to do something that materially changes our risk profile and we're not going to do something that does not meet our return criteria. I hope that helps, Julien.

Absolutely. Excellent. And just a quick follow-up, a clarification, just with respect to the precise succession timing as you all think about it and don't mean to pin you down here and now but how are you thinking about it? Just the timeline here if you will?

For CEO succession?

Yeah. Just to make sure we've got that clear.

Okay. Sure. Well, we have not set a timetable for any additional change at the CEO level. So I think, Julien, you'll have me around to ask questions to for quite a while.

Excellent. Okay, I'll leave it there. Thank you.

Very good. Thank you, Julien.

Your next question comes from Greg Gordon with Evercore. Your line is open.

Good morning.

Good morning, Greg. Yeah.

How are you doing, Greg?

I'm good. Before I ask you any questions, do you have any questions for me about the Jets?

I kind of do, but we'll save those for later.

Great.

By the way, my Bucks are 7-0.

They do look good. Basketball is not New York's forte right now. That is for sure. So I've got a couple questions. The first is I know that and I asked you about this on the second quarter call, so I'd just love your observations after another quarter has gone by. I know that there's a lot of activity out at the Foxconn site, but there continues to be some question about exactly what they are going to build there. Now, I know they're committed at a high level to a level of investment and a level of job creation, but the level of economic demand pull for energy that comes from both that site and from the follow-on investment for the supply chain will be a big driver for what you ultimately have to invest to serve the region. And so I'm wondering at this point, given that the increase in the CapEx budget, while it was substantial, wasn't demonstrably in the core electricity business, what you're waiting for in terms of visibility so that we can then get a sense of what you're going to need to invest to support the economic growth that comes from that?

Good questions all, Greg, and let me take them one at a time. First of all, let me try to clarify the changes in our five-year capital plan compared to the previous plan for 2018 through 2022. What you see basically is an increase in the natural gas delivery segment because, again, we are seeing growth across the board in terms of all of our customer segments in terms of natural gas demand. And that includes about $140 million of capital that we expect to spend in the area that Foxconn is being developed. So when you look at our capital spending, our focus remains clearly on the regulated business and the growth opportunities that we need to serve customers reliably in the regulated business. The increase in the natural gas delivery segment was somewhat offset by a slight decrease in transmission. And there, American Transmission is coming off of two very large projects that they're completing inside the footprint. And as you know, some of the transmission is a bit episodic and project by project. So the downturn we're seeing here in the American Transmission Company piece of the budget is really just reflecting the completion of two very large capital projects. On the energy infrastructure piece that we talk about, it's only 10% of our projected capital spending for the next five years. So I just want to make sure that everyone understands. Our focus is still clearly on the growth in the regulated business and the investments we need to maintain reliability and great customer service. But we do see growth particularly in the natural gas delivery segment. Now to Foxconn itself, they are in the final stages of completing their design for that entire campus, and our technical people meet with their folks literally every week.…

It does, thanks. That's all good. I'll hop off there. That's really thorough, thank you.

You're welcome.

Your next question comes from Michael Weinstein with Credit Suisse. Your line is open.

Good afternoon, Michael. How are you doing? Michael Weinstein - Credit Suisse Securities (USA) LLC: Hi guys. Hey, Gale, how are you doing?

We're good. Michael Weinstein - Credit Suisse Securities (USA) LLC: Glad to hear it. Hey, if the returns are very similar to regulated returns on the energy infrastructure business, why limit it to 10%? Is there any risk that is not apparent that might want you – that might force you to limit to 10% or make it desirable to limit it in some way?

Michael, if I'm understanding your question, is there any risk that we see that might put the 10% returns in danger? Again, we're only looking at projects... Michael Weinstein - Credit Suisse Securities (USA) LLC: No. I'm thinking the 10%, like limiting it to 10% of earnings, I think that's what you were referring to before, right?

No, no. What I meant was 10% of our capital spending plan for the next five years. Michael Weinstein - Credit Suisse Securities (USA) LLC: Okay. And why limit it to that? Why have any limitations on it if it's having the same kind of returns of the utility?

To be honest with you, we are seeing enough significant opportunity directly in our retail regulated business that we're also seeing increased capital opportunities there. So we want to keep a reasonable balance here. If we saw some incredible opportunity that put us above the 10% of capital spending in that segment in the next five years, we will certainly do it. But I think that's a reasonable estimate at this point and again in part because we're also seeing really good opportunities in our core. Michael Weinstein - Credit Suisse Securities (USA) LLC: Got you. And also the $140 million that you alluded to for extra gas spending limits directly tied to the Foxconn site, is that for primary service to Foxconn itself? Or is that secondary service to surrounding community needs or growing community needs? Or is it some combination of both? And then a follow-up question to that would be, you also said that this is just the very beginning stages of something that is going to be huge. Is that also the same – is the $140 million also the beginning of some potentially huge opportunity, just the tip of the iceberg, if you will?

Michael, just to be clear, the $140 million that we've actually filed for approval, the $140 million of gas distribution projects that we filed for approval with the Commission represents the additional investment that we think we're going to need to accommodate the economic growth in the region. So it's Foxconn plus, if you will, so that's about $140 million investment, two separate gas distribution projects. Because we simply don't have enough infrastructure in terms of natural gas delivery in that area right now to accommodate both Foxconn's growth and the additional growth we're starting to see. Could the natural gas delivery segment grow even faster? If we see additional economic growth beyond what we're projecting in that area, yes. But at the moment, I think that initial $140 million investment will cover us for the next several years. Michael Weinstein - Credit Suisse Securities (USA) LLC: Got you, thank you very much.

Thank you, Michael.

Your next question comes from Praful Mehta with Citigroup. Your line is open.

Thanks so much. Hi guys.

How are you doing?

Hi, good. Well, thanks for taking my question. I guess the catalytic effect was actually quite an interesting point and it clearly sounds like a big opportunity around Foxconn going forward. How should we think about it though from a growth and opportunity perspective? If that plays out, is that increasing your growth from the 6% going forward? Or do you think about it more as maintaining the 6% but helping keep the build pressure down through that cycle? How should we kind of frame the opportunity from a utility perspective?

Great question and I think it's the latter. I mean, first of all, there's no question in my mind that all the economic development we're seeing. I mentioned Komatsu which is a major project right in the harbor district in Milwaukee. There's HARIBO, the candy company that's coming to Southeastern Wisconsin. Milwaukee Electric Tool has had two major expansions. Amazon a couple of years ago built a huge distribution center and is expanding or has expanded that distribution center. So all of that really is – and the investment opportunity for infrastructure, a regulated infrastructure that we need to make to support all that growth. I think that is in my mind basically giving us an even longer runway to our 5% to 7% or in the middle of the range low 6% growth rate. And definitely with stronger kilowatt hour sales and you'll see as we roll out our plans in more detail at EEI, you'll see we've raised our projected growth rate of sales for both natural gas and electricity a bit. That's also helping to keep rate pressure down. No question about it.

Got you. Thanks. That's helpful color. And then secondly, I mean given all this opportunity that you have around investment, both on the regulated and the unregulated side, I guess the constraining factor must be the balance sheet and the credit. And so just to understand that, you're clearly getting to be a cash taxpayer by 2019, so I guess at some point the metrics would come a little bit of pressure in 2021 as you become a cash taxpayer. Should we think about that as a constraining factor in terms of how much you can push from a credit perspective or holdco debt perspective? How should we think about credit in the context of this opportunity?

Well, I'll start and then I'm going to ask Scott for his view to give you as well. I would say this, I mean, and we did say we would expect absent any other infrastructure projects that we would become a cash taxpayer next year. But again, we have the tax appetite to be able to take on some very good projects that don't change our risk profile. So I don't particularly see – we are going to maintain a strong balance sheet, we're going to maintain our credit rating, we're going to maintain the FFO metrics where we need them to be. But I don't see that as a huge deterrent at this point.

No, no, you're exactly correct, Gale. That 16% to 18% FFO-to-debt is right in line, in fact we're running at the high end of that this year. And as you look at opportunities, and you take 100% bonus depreciation perhaps on another project or two will even help our FFO in the other years. So we're comfortable in that 16% to 18%, we just want to be realistic on the opportunities and how we'd roll out our capital plan.

Got you. Thanks, Scott. So you don't see it even in 2021 any pressure to that 16% to 18% coming down or staying at the lower end of that 16% to 18%.

No. Not at this time.

No, not at this time. No.

All right. Great. Much appreciated, guys. Thanks so much.

Thank you for your question.

Your next question comes from Michael Lapides with Goldman Sachs. Your line is open. Michael Lapides - Goldman Sachs & Co. LLC: Hey, Gale. Thanks for taking my question.

You're welcome Michael. Michael Lapides - Goldman Sachs & Co. LLC: I actually have one small housekeeping item which is, if I look at your $3.32 in EPS guidance for the year, and then the $2.70-ish or so you've done year-to-date, that implies $0.62 for the fourth quarter. That's below fourth quarter last year by a decent chunk. Just curious was there something in the fourth quarter last year that was unusual or abnormal that was a benefit that you might not get in this fourth quarter? Or is there something else fundamental or just one time in nature that is happening in the fourth quarter?

Good question, Michael. And I think – and I'll ask Scott to give you some details on this. But long story short, our performance at the Wisconsin utilities has been very strong this year. And you remember the earnings sharing mechanism that we have in place with anything above our allowed retail rate of return. So, in essence, any outperformance that we would have in the fourth quarter of this year would basically be subject to the earnings sharing and therefore not flow through to our bottom line earnings per share report. So, you have to take into account where we were last year with earnings sharing and where we were this year. Scott?

Yeah. That's exactly it. So going into last year's fourth quarter, we were not into earnings sharing. And between fuel and weather, we gained about $0.09 and just started to get into that sharing mechanism of about $2 million. And like Gale said, we're near the top of that 50-50 band now. So the opportunity for additional $0.09 doesn't exist. Michael Lapides - Goldman Sachs & Co. LLC: Got it. Okay. One other thing, I'm going to sound like a broken record, you can go back and read transcripts for the last two and half years...

You know when I can't get to sleep at night, I go back and where were the Michael questions? Michael Lapides - Goldman Sachs & Co. LLC: Well, it's the same question every time because your demand growth numbers are clearly conservative, they have been for two, two and half, almost three years on the gas side, any thoughts on the fact that they maybe also conservative on the electric side as well? And what would have to happen to make you rebase higher?

Well, I think when you see all the details of our capital plan and our projections going forward, we have rebased a little bit. We were basically projecting flat almost 0% to 0.5% electric demand growth. I think Scott is adding almost 1% to that in terms of annual expectation of electric demand growth in light of the opportunity we're seeing. And then we're also rebasing up just a hair our natural gas expectation for growth as well.

That's correct. And this last year across-the-board and every class we're seeing that natural gas. So having stable gas prices I don't – residential customer growth is good but still as appliances get replaced, they're just becoming more efficient. So, I just have a hard time seeing residential continue to grow at that same pace year-over-year other than new customers. Michael Lapides - Goldman Sachs & Co. LLC: Got it guys. Thank you. Much appreciated, Gale, Scott.

You're welcome, Michael. See you soon.

Your next question comes from Jonathan Arnold with Deutsche Bank. Your line is open.

Hi, Jonathan.

Hi, guys.

Hey, Jonathan. Jonathan, a question for you, I've been meaning to ask, how's your mom doing in England?

Oh, yeah. She is fine. Thank you. Gale, they haven't deported me yet, but we'll see how we go with that.

Well, she's still getting good electricity from my former company I take it.

Yes, indeed. So just on the capital plan you gave us the 10% number. I mean, this might be something you'd rather save for EEI, but when you showed that graphic before, the energy infrastructure was 8% for the capital plan excluding transmission. Are we now talking about 10% on the same basis? Or is it 10% of the $14.1 billion?

No. It's 10% of the $14.1 billion.

Okay, great. Thank you for that. And then on transmission, just looking back, I think what you had said was that you were booking 10.82%. But you expect it to migrate to something like 10.20% ROE at some point. My question is at what point in your sort of projection of this earnings, the 6% level, do you see that migration happening? And then if you have any comments on this related machinations out of FERC on the model?

Well, Jonathan, you're correct on both counts. We're still booking because that's the allowed rate of return today, the 10.82% on our earnings from American Transmission Company. As you know there have been a number of complaints from around the country pending at the Federal Energy Regulatory Commission from customers asking whether or not the current allowed rates of return on transmission all over the U.S. are "in the zone of reasonableness or not." As you know, FERC has begun to take some action. The first indication of where they might go just came probably 10 days, two weeks ago, when they began looking at the complaint that's on their docket from the Northeastern United States, the Northeastern Utilities, if you will. And FERC has laid out for comment a proposed new methodology, which combines four different metrics as opposed to just a single metric that they have been using in the past. Again, I think it's going to be a while before we get any clarity from the Federal Energy Regulatory Commission because I believe first of all there's a 60-day comment period. That puts us close to the end of December, so I would expect them to take some action in the first half or first quarter of next year. And then I would guess that the Midwestern complaints would be on the docket after that. But we are still assuming that the 10.2% will come down, and our conservative estimate right now is 10.2%. And that 10.2% is embedded in our 5% to 7% growth rate, Scott.

That's correct. So we haven't made a final determination of when we think it will go down yet, but for our five-year plan we're assuming it goes to the 10.2%, which that includes the 50 basis point adder for being part of MISO.

Okay, great. Thank you for that clarity. And then just on the – you gave some pretty explicit guidance on where you see earnings within the range. Do you see with this plan a reasonably linear trajectory, or is it possible to start out higher and migrate lower, that way you have less visibility at the back end, just any – or was that intended more as throughout the plan type of level?

It really was intended pretty much to be linear throughout the plan.

Okay, great. That's all I have. Thank you, Gale.

You're welcome, Jonathan.

Your next question comes from Paul Ridzon with KeyBanc. Your line is open.

How are you, Gale?

We're good. How are you, Paul?

Good. Just along the lines of a previous question, the 10% of the CapEx budget being for the infrastructure segment, is that constrained at all by your statement that you won't issue equity? If you're willing to issue equity, could you make that bigger?

If we wanted to issue equity, we could make it bigger, I assume. But again, we are being very, very disciplined in terms of the projects that we want to bring into this segment. So I think the reason we landed on this particular number for the Energy Infrastructure segment and the reason we ended up at 10% of our expected capital spend over the next five years with basically 20% of it already done, is – that's about the quality of the projects we're looking at. I think since we're being very disciplined and very risk-averse here, and we're not going to change our risk profile, that amount is about what I think we can spend in terms of the kind of projects we want to bring in-house. So it's really constrained more by our disciplined approach, by our return criteria than it is, I think, Scott, by any type of financial constraint.

No. If opportunities came, we'd have room to even do more than that 5% to 7% without issuing any equity. So it's not the financial, it's more of the opportunities to make sure we're realistic in the expectations to achieve our returns.

Thank you, that's helpful. And then just on the FERC ROEs, are you reserving at all against the 10.82%?

No, the 10.82% we are not. There is one complaint period that does exist that is open yet, and that is reserved at that 10.2% level. But that's the open complaint period that we're waiting to hear the final results on.

And then on the FERC rules, basically the 10.2% – for this period the 10.2% is basically the allowed return.

The 10.82%.

I'm sorry the 10.82%, yes, is the allowed return. So other than the one complaint period that Scott talked about where we do have a reserve, we don't think there's any real challenge ability to basically take on the 10.82% because that is the allowed return for this period.

Correct.

Okay, thank you.

You're welcome.

Your next question comes from Richard Ciciarelli with Bank of America. Your line is open.

Good afternoon, Richard, how are you? Richard is not well.

Hey, I think it's Julien here again. Can you hear me?

Hi, Julien.

Sorry, sneaking on here real quickly. Can I just clarify real quickly? Just in the transcript it looks like you might have said a different earnings base than you might have meant for 2018 for the midpoint of the guidance? You introduced 2018 earnings guidance earlier this year at $3.26 to $3.30.

Right.

The midpoint of that is the new base, right? At $3.28, is that correct?

That is exactly correct.

Okay. I just wanted to clarify that for the transcript. Thank you.

You're welcome Julien. I think you are trick-or-treating and masquerading as one of your analysts.

Your next question comes from Vedula Murti with Avon Capital. Your line is open.

Hi, Vedula. How are you today?

I'm doing well, Gale. Hey, good luck to your Brewers next year.

Yeah. Hey, my Bucks are 7-0.

Okay, something to look forward to. My question was mostly what Greg had asked about more with Foxconn. And obviously, there's a lot of noise around it and lots of politics and posturing or whatever. But within all of that, what is it that we should really pay attention to, to find out whether in fact there may be some lag or some give or whatever term you want to use in terms of what maybe some people thought about either its timing or its scale of capital investment relating to what we believe we've heard about originally?

Everything we're seeing is Foxconn is full speed ahead. Now we do have a gubernatorial election here and there have been some discussions by the Democratic candidate for governor on whether or not he would want to relook the incentive package for Foxconn. If that were to happen I mean if he were to be elected and he decided to find some way to overturn legislation that's in place that probably would be a factor that you would want to look at in terms of whether or not there would be some slowdown in the Foxconn plan. But right now given what Foxconn is actually doing on the campus, the construction progress they're making, the additional investments across the state that they've announced, right now it appears that they are full speed ahead.

Okay, I appreciate the clarification. Thank you.

You're welcome.

Your next question comes from Andrew Levi with ExodusPoint. Your line is open.

Hey, Gale. How are you?

Hey, Andy. I'm great. How are you doing?

I'm doing well. Just back to Julien's last question just to make sure. So I guess when you made your first comment, the Bloomberg transcript picked up $3.20 as the midpoint, which obviously wasn't your guidance. So you're growing off of $3.28, is that correct?

That is correct. That is correct and we'll have to sue Bloomberg for fake news.

Okay. I just wanted to make sure. Okay. Thank you very much.

You're welcome Andy.

Your last question comes from the line of Paul Patterson with Glenrock Associates. Your line is open.

Good afternoon, guys.

Hi, Paul. What's shaking?

Not much. What I wanted to ask you about was just sort of back on the infrastructure projects. You mentioned that the returns might be on the high side initially in terms of how you're looking at the trajectory of the return. And I'm just wondering if you could sort of give a little bit more flavor as to when we look at this CapEx, what the earnings profile is over time, do you follow me?

Sure. And again, over time with the projects that we have in hand and the projects we have announced, we would expect over time over kind of our useful life of the project the returns to meet the kind of criteria we talked about which is at or slightly above our retail rates of return.

Right. But I guess what I'm wondering is, is that, you made it sound like some of it might be frontend loaded. And so what I'm wondering is, I understand that on average over time that's what it would be, but it sounds like some of it might be frontend loaded, and so I wanted to get more of a sense as to how that might be distributed? Do you follow me? How much of a boost we might be seeing in the early years versus later years?

Right. Let me frame that for you and then I'll let Scott give you some detail. The projects we're talking about really are in many cases either solar or wind or gas storage or some type of renewables. Particularly with the wind, you have a very heavy tax credit influence in the early years. Scott?

Yeah. So, specifically, the two projects we've had so far on the wind side, production tax credits are in the first 10 years, so the returns are north of that 10% by a couple of percentage points in that first 10-year period along with good cash returns because of the bonus depreciation. So it's really that first 10 years when you have the production tax credits that really make it a little higher on average.

Okay. So really we're going to be looking – sorry, I don't mean to interrupt you. Go ahead.

No problem. I also was going to say actually believe it or not because of the cash returns, it's helpful to our FFO to debt calculation.

Okay, sure. So, okay – so we're talking basically like the PTC kind of concept, so we're talking like a good period of time where you'll be having the higher returns versus you won't be having – there are no big upfront benefits to EPS. This is more just a 10-year timeframe where you're going to be...

Right. Right.

Okay. Okay. Just wanted to make sure about that. And then the other question that I have is, so there's a decrease in electric generation in the ATC and you mentioned something about the ROE, and I apologize if I just wasn't completely clear on this. But the ATC – the fall off in the CapEx, did that have to do with what you're seeing in terms of returns and what have you? Or could you just clarify a little bit about what's driving the change in CapEx profile at ATC and if it has anything to do with the ROE cases that you're seeing?

Nothing whatsoever to do with the ROE cases. Everything to do with the fact that ATC is just completing two very large construction projects, transmission project extensions and new transmission in our footprint. And they're rolling off these two very large projects from a year. So we have a high year comparing to a slightly lower year, but it has nothing to do with the potential change in ROE.

Okay, most of my questions were answered. So thanks so much.

You're more than welcome.

Well, I believe that concludes our conference call for today. Thanks so much for joining us. If you have any additional questions feel free to call Beth Straka at 414-221-4639. Thanks everybody. See you on the West Coast.

This concludes today's conference call. Thank you all for joining. You may now disconnect.